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On Offshoring and Trade Deficit

Hamid Beladi and Reza Oladi

Review of Development Economics, 2014, vol. 18, issue 3, 517-523

Abstract: The paper constructs a general equilibrium model of North–South trade with nontraded goods, real exchange rate, and a continuum of components that North partly offshores to South. It is shown that a protectionary policy which restricts offshoring may have the unintended consequence of widening the trade deficit.

Date: 2014
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